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Monday, February 23, 2015

Hoteliers are calling out the OTAs ‘Best Price’ Bluff

Top 2 value propositions OTAs have been selling to shoppers are :

1. OTAs offer most variety and options….maybe2. OTAs offer Best Price….. now that’s a Bluff!

Shoppers, at least for the most part, are NOT aware of Rate parity provisions imposed by OTAs on hoteliers, putting hotels prices across channels, from the hotel’s own website to the OTAs websites in parity, offering hotel accommodation at the Same exact Rate = Price.

Some say Rate parity helps hotels avoid confusion over price points across different distribution channels. That might have been a positive point IF the cost of securing bookings across these channels was similar.

Problem is, with OTAs commissions ranging from 15-22%, their impact on revenue margins makes the OTAs distribution channels very expensive.

Rate parity is indeed an obstacle for a hotel that wants to differentiate between distribution channels, for example favoring a particular channel likeDirect Bookings on it’s own website, training shoppers to go there for the best price.

It is not a surprise that one of the hottest topics for Hotel Revenue managers now is, Increasing Direct Bookings on their hotel websites, and relying less on OTA bookings to improve revenue margins.

2 Important facts we know about online Shoppers for hotel accommodations:

A. Price is King: With 85% of travelers surveyed saying that PRICE is the most important factor when determining where to book. [according to a Google research]

B. They [Online Shoppers] are on YOUR website: 52% of shoppers will visit your hotel’s website after seeing you on an OTA [according to a Google research]

How do we make A+B above work for hoteliers: Call the OTAs Best Price Bluff!
We will show those 52% of shoppers that saw your hotel on the OTA a price comparison, proving rates are the same or higher on OTAs [remember Price Parity], removing their motivation to return to the OTAs to book with no savings. Why buy from a distributor or a re-seller when you can buy from the source, when you’re right there, on the hotel’s website, especially if the price is the same?

Solution:BookingDirection’s technology works on your Hotel’s website to increase direct bookings by providing online shoppers the OTA web experience and price transparency they have grown to like — e.g. showing them “all” the prices in the marketplace, and proving that the hotel has the lowest price. In so doing, the need to comparison shop is eliminated.

Bottom line, EARN MORE by, increasing the percentage of website shoppers booking directly with you and reduce commission payout to OTA’s.

We’re in closed beta, helping hoteliers to get more direct bookings. Join the waiting list and we’ll contact you once additional hoteliers are added.